Canada’s vast quantities of oil sands have been described variously as the world’s third largest proven crude oil reserve, Canada’s path to energy superpowerdom, ‘game over for the climate’, and ‘the most destructive project on earth’. Unsurprisingly, they have become an object of acrimonious public debate and significant political maneuvering.

But what exactly are Canada’s oil sands, and how does oil sand extraction work? What’s at stake with the extraction and use of Canada’s vast oil sands deposits?

This post, the first in a series of two, will explore the oil sands resource, the technology involved in extracting it, and the consequences of doing so. A subsequent post will tackle larger questions surrounding the economics of oil sands and the political debates raging around their extraction, transport, and use.

The Resource

The terms ‘oil sands’, ‘tar sands’, and ‘bituminous sands’ are used interchangeably. Though ‘bituminous sands’ is the most technically accurate, all three terms describe geological formations in which thick, highly viscous bitumen—a form of petroleum that is semi-solid at room temperature—is suspended in a mixture of sand, clay, water, and other trace materials. In-situ oil sands look like black, sticky sand.

Once extracted, bitumen itself is a thick, black fluid of extremely high viscosity (hence the shorthand ‘tar’). It is typically used to make asphalt or processed into synthetic oil, which can be used interchangeably with conventional crude oil.

According to a World Energy Council report, proven reserves of bitumen total roughly 250 billion barrels globally. Of this 250 billion barrels, approximately 178 billion, or 70%, are located in Canada. Almost all of these 178 billion barrels are located in Alberta, and most of this Albertan bitumen lies in a single gigantic formation, the Athabasca oil sands.

According to analysis by the Canadian Association of Petroleum Producers (CAPP), an industry group, Canadian oil sands output reached 1.6 million barrels per day in 2011, a figure projected to rise to 2.3 million barrels per day by 2015 and 5.0 million barrels per day by 2030.

Technically speaking, bituminous oil sands are easy to access. They’re situated close to the earth’s surface, obviating the need for deep or complex drilling operations. They’re also favorably situated both
politically and logistically: the largest deposits are located in politically stable Canada, and most are concentrated in a relatively small, easily accessible region in Alberta.

The combination of large reserves, political stability, and geographic concentration has led companies to take a strong interest in Canadian bituminous oil sands and plow large amounts of investment into their exploitation.

The Technology

Oil can be extracted from bituminous sands through a variety of methods. These methods can be divided loosely into two categories: in-situ techniques in which the bitumen is extracted from the sands on site, and strip mining techniques in which the sands are dug up and transported to off-site bitumen extraction facilities.

Strip mining is the simplest and best-known technique; it’s also the most notorious as a result of the scars it leaves on local landscapes.

Of the in-situ extraction methods, the most common is steam assisted gravity draining (SAGD). This technique involves drilling two horizontal wells into an oil sands deposit, one extending above the deposit and the other below it. Steam is pumped into the deposit through the former, melting the in-situ bitumen such that it drains into the latter. The heated bitumen in the lower well is then pumped to the surface. The Seattle Times has an excellent visual tool depicting this process as well as basic surface mining. Other in-situ extraction processes include cold flow extraction, cyclic steam stimulation, and solvent extraction, and several experimental methods are currently under development.

Once extracted, the final stage of oil sands exploitation is the ‘upgrading’ of extracted bitumen into synthetic crude oil. This is usually done through catalytic hydrocracking, a process often used to separate jet fuel and diesel from conventional crude oil. Once upgraded, synthetic crude oil can enter the global crude oil supply chain; typically it is transported to refineries to be turned into finished products such as kerosene, gasoline, and diesel.

The Consequences

The extraction of bitumen from oil sands faces two major environmental constraints: the principal extraction techniques tax local water resources, and both extraction and use of oil from oil sands create significant carbon emissions.

According to analysis by the the Pembina Institute, surface mining of oil sands produces 2-4 barrels of waste water per barrel of oil produced. In-situ techniques, at 1.5 barrels of waste water per barrel of oil generated, are less water intensive but still demanding of significant water resources.

The water-intensity of these extraction processes—and the sheer quantity of waste water generated—could impose constraints on future oil sands extraction. So too could legal actions by downstream users of the Athabasca river, which is already showing signs of contamination from oil sands exploitation.

While the water-intensity of oil sands extraction is important regionally, most global attention has focused on the atmospheric consequences of oil sands exploitation. There are two main issues: the total amount of carbon embedded within oil sands reserves and the carbon emissions associated with extracting oil from bituminous oil sands.

The first issue is more general: the Canadian oil sands represent a huge stock of fossil fuels, the burning of which is inconsistent with the lowering of global carbon emissions and a transition to a low-carbon economy. According to one estimate, current Canadian oil sands reserves represent 22 billion metric tons of carbon dioxide, and total Canadian oil sands resources represent 240 billion metric tons. Clearly, adding 22 billion or more metric tons of CO2 to the atmosphere will not help limit atmospheric CO2 concentrations.

The second issue is that the process of extracting this oil is itself more carbon intensive than extracting conventional oil. According to an analysis by IHS CERA, the ‘well-to-wheels’ emissions of a barrel of oil derived from oil sands is between 5% and 15% higher than those produced by a barrel of conventional oil. According to the US Department of State’s analysis, the figure is closer to 17%. NRDC, who have analysed CERA’s methodology, argue that CERA’s upper bound is far too low and that a range of 8% - 38% is more likely.

Conclusions

Regardless of the precise well-to-wheels figures, the carbon dioxide implications of oil sands are clear: deriving oil from bituminous oil sands is more carbon dioxide intensive than extracting conventional oil, and fully exploiting global oil sands reserves is likely to lead to significant increases in atmospheric carbon dioxide concentrations.

For these reasons, the exploitation of oil sands has become an enormously contentious political issue. In this post, I’ve outlined the basic information on the resource necessary to understand the political and economic debates surrounding it. My next post will analyse the contours of these debates more closely and assess their implications for future oil sands development.